Have equity in your home? Want a lower payment? An appraisal from Gregory James Company, Inc. can help you get rid of your PMI.

A 20% down payment is usually accepted when purchasing a home. The lender's risk is oftentimes only the difference between the home value and the amount outstanding on the loan, so the 20% supplies a nice buffer against the costs of foreclosure, selling the home again, and typical value changes in the event a borrower defaults.

During the recent mortgage boom that our country recently experienced, it became customary to see lenders only asking for down payments of 10, 5 or sometimes 0 percent. How does a lender endure the added risk of the small down payment? The answer is Private Mortgage Insurance or PMI. PMI covers the lender in the event a borrower is unable to pay on the loan and the market price of the property is less than what is owed on the loan.

PMI can be expensive to a borrower on the grounds that the $40-$50 a month per $100,000 borrowed is compiled into the mortgage monthly payment and oftentimes isn't even tax deductible. Separate from a piggyback loan where the lender takes in all the damages, PMI is advantageous for the lender because they collect the money, and they receive payment if the borrower defaults.


	Does your monthly mortgage payment include a fee PMI? Call Gregory James Company, Inc. today at 770-749-0042 or send us an e-mail. Documentation of your home's current value could save you thousands.

How can homebuyers keep from bearing the cost of PMI?

The Homeowners Protection Act of 1998 requires the lenders on the majority of loans to automatically stop the PMI when the principal balance of the loan equals 78 percent of the beginning loan amount. The law stipulates that, at the request of the homeowner, the PMI must be released when the principal amount reaches only 80 percent. So, keen homeowners can get off the hook ahead of time.

Because it can take several years to arrive at the point where the principal is just 80% of the original amount of the loan, it's crucial to know how your Georgia home has grown in value. After all, all of the appreciation you've accomplished over time counts towards abolishing PMI. So why should you pay it after the balance of your loan has fallen below the 80% mark? Your neighborhood might not follow national trends and/or your home may have secured equity before things declined. So even when nationwide trends indicate decreasing home values, you should understand that real estate is local.

A certified, Georgia licensed real estate appraiser can help home owners figure out if their equity has exceeed the 20% point, as it's a tough thing to know. It's an appraiser's job to understand the market dynamics of their area. At Gregory James Company, Inc., we're masters at analyzing value trends in Cedartown, Polk County, and surrounding areas, and we know when property values have risen or declined. When faced with data from an appraiser, the mortgage company will generally remove the PMI with little anxiety. At which time, the homeowner can delight in the savings from that point on.


	The amount you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Gregory James Company, Inc. when it comes to appreciating values in Cedartown and Polk County. Contact us today.

Want to learn more about PMI and the Homeowners Protection Act? Click this link:

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year

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Blog Updated 01/28/2012